Daily Tech Snippet: Tuesday, August 23

• Former Flipkart CEO’s Employee Clash Shows Indian Startup Trauma..: India’s largest online shopping service is heating up, and not in a good way. Flipkart’s regular Friday townhall grew tense after employees incensed by hundreds of job cuts openly accused management of betrayal. Taken aback, chairman Sachin Bansal countered that the departures stemmed from poor performance and he lost his job as chief executive for the same reason. The co-founder admitted the company had missed financial targets in recent months, prompting an overhaul of its top rungs, according to employees who attended the meeting. He didn’t elaborate but recent moves -- including a brief decision to go mobile app-only after ditching its fashion site -- may have granted an opening to a hard-charging Amazon.com Inc. Bansal’s unusual candor, which drew applause, underscores the plight of the country’s technology sector as competition intensifies and funding begins to dry up.

• ..Even as analysts opine that Amazon overtook Flipkart in India July e-commerce sales: Barely three years after launching in India, Amazon (Amazon Seller Services Pvt. Ltd) likely exceeded Flipkart in terms of gross sales in July. Flipkart reported gross sales or gross merchandise value (GMV) of less than Rs.2,000 crore in July, while Amazon’s gross sales crept up above Rs.2,000 crore, according to five people familiar with the companies’ numbers. Another local online marketplace Snapdeal (Jasper Infotech Pvt. Ltd) reported gross sales numbers of roughly Rs.600 crore, a fall of more than 50% from the sales it had been generating until the end of last year, said two other people, familiar with the company’s numbers. Gross sales refer to the value of goods sold on a site, and not net revenue. (Flipkart, Snapdeal and Amazon are structured as marketplaces because of regulations; their net revenue comprises the commissions they charge their third-party sellers on every transaction and fees for services) To be sure, the numbers are only for the month of July and the market share battle between Flipkart and Amazon is far from over. Flipkart’s numbers also exclude revenue at Myntra and Jabong, the two large fashion retailers it owns. Snapdeal’s numbers exclude sales at FreeCharge, its payments arm. Including Myntra and Jabong revenues, Flipkart is still comfortably ahead of Amazon. Yet, the numbers confirm reports in Mint and other publications since the start of the year that Flipkart and Amazon are running neck-and-neck in the e-commerce market share battle and the latter is close to overtaking it. This is the first time the exact picture has emerged.

• Chinese investors buy ad tech startup Media.net for $900 million: Advertising technology startup Media.net, founded by tech entrepreneur Divyank Turakhia, said on Monday it had been acquired for about $900 million by a group of Chinese investors. The deal would represent the third-largest in the ad tech industry, after Google's acquisition of DoubleClick and Microsoft Corp's for aQuantive. More here: Ad-tech firm Media.net Sells to China Group for $900 Million: The startup, which powers contextual ads offered by Yahoo! and Microsoft’s Bing, plans a move akin to a reverse merger that would make it a public company in China.Media.net, which is based in Dubai and New York, is touting this as the third-largest ad-tech acquisition in history. However, the complex deal more closely resembles a reverse merger, where a private company takes over a public one and bypasses the formalities of an initial public offering. Technology entrepreneur Divyank Turakhia started Media.net in 2010 and bootstrapped the business. The company provides the technology powering contextual ads offered by Yahoo! Inc. and Microsoft Corp.’s Bing search engine. The system is similar to one offered by Google, choosing which ads to show based on the content of the web page they appear on. The deal comes as merger activity involving ad-tech companies is declining. There were 43 deals during the first half of the year, according to research firm PitchBook Data. That’s a 45 percent decline from the same period last year. Media.net generated $232 million in revenue last year, more than half of which came from mobile visitors, Turakhia said. The U.S. accounts for 90 percent of Media.net’s revenue, but the company is hoping to make a big push into China after the deal, he said. 

• Amazon wants to sell a cheaper music subscription service that will only work on its Echo player: Spotify, Apple Music and everyone else cost $10 a month. Amazon wants to charge half of that. Amazon wants to launch a music subscription service that would work the same way services from Apple, Spotify and many others work: $10 a month, for all the music you can stream, anywhere you want to stream it.  But Amazon is also working on a second service that would differ in two significant ways from industry rivals: It would cost half the price, and it would only work on Amazon’s Echo hardware. Industry sources say Amazon would like to launch both services in September, but has yet to finalize deals with major music labels and publishers. One sticking point, sources say, is whether Amazon will sell the cheaper service for $4 or $5 a month.